UAE and Vietnam Ink Landmark Deal, Paving Path to New Trade Horizons

The UAE has solidified its economic ambitions in Southeast Asia with a newly signed Comprehensive Economic Partnership Agreement (CEPA) with Vietnam, a pivotal move within the nation’s broader strategy to boost trade alliances and diversify its economic reach. UAE ministers and officials hailed the agreement as an essential step in transforming the UAE’s trade ties, with Vietnam emerging as a strategic partner in Asia’s evolving economy.

Minister of State for Financial Affairs, Mohamed Hadi Al Hussaini, described the agreement as a milestone for both nations. "With the signing of the Comprehensive Economic Partnership Agreement between the UAE and Vietnam, we are opening new paths for economic cooperation that will benefit both countries," Al Hussaini stated. He emphasised that the removal of trade barriers and improved market access would not only lift bilateral trade but unlock fresh investment opportunities, supporting the UAE's ambition to become a global trade and investment hub.

Suhail bin Mohammed Faraj Al Mazrouei, Minister of Energy and Infrastructure, noted that the deal holds transformative potential for cooperation, particularly in renewable energy. “The Comprehensive Economic Partnership Agreement with Vietnam opens new horizons for joint cooperation in the energy and infrastructure sectors, which are key sectors for long-term development for both countries,” he explained, adding that the UAE's renewable energy expertise could bolster Vietnam’s growing role in the ASEAN region, where it accounted for nearly 69% of solar and wind energy production in 2023.

The agreement aligns closely with the UAE's industrial ambitions, according to Dr. Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology. Dr. Al Jaber highlighted its alignment with Operation 300bn, the UAE's national industrial strategy, saying, "This agreement also enhances the access of UAE industrial exports to Vietnam and ASEAN countries," expanding the UAE’s manufacturing and trade networks across Asia.

Minister of Economy Abdulla Bin Touq Al Marri underscored the economic potential for the UAE in Southeast Asia’s largest growth markets. “The UAE and Southeast Asia share many common interests,” he remarked, pointing to sectors like food security, logistics, and manufacturing. With Vietnam’s GDP projected to reach $470 billion this year and an expected 6% growth rate in 2025, Al Marri said the UAE is well-positioned to tap into these high-growth sectors, making Vietnam an increasingly attractive market for UAE exporters and investors.

Investment Minister Mohamed Hassan Al Suwaidi echoed this sentiment, pointing to Vietnam’s rapid economic ascent and strategic location in Asia. "By identifying growth-focused partners and securing mutually beneficial deals, the UAE’s Comprehensive Economic Partnership Programme helps expand our global investment portfolio," he explained, noting that Vietnam’s robust infrastructure and logistics industries present numerous opportunities for UAE capital.

In addition to economic benefits, the agreement paves the way for collaboration on environmental and food security initiatives. Minister of Climate Change and Environment Dr. Amna bint Abdullah Al Dahak highlighted the potential for sustainable agriculture and food supply chains, noting Vietnam’s leading agricultural sectors, particularly in rice, coconut, and cashews.

Dr. Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade, emphasised Vietnam’s position as the UAE’s largest non-oil trading partner in ASEAN. He highlighted that non-oil bilateral trade with Vietnam had surged by 8.7% to $6.1 billion in the first half of 2024, with UAE exports climbing by nearly 60% year-on-year. "The agreement aligns with the nation's broader foreign trade strategy, aiming to increase non-oil trade to AED4 trillion and non-oil exports to over AED800 billion by 2031," Dr. Al Zeyoudi noted.

The UAE’s pursuit of international agreements, including the recent CEPA, is part of a broader shift towards building resilient trade partnerships, according to Ahmed bin Ali Al-Sayegh, Minister of State. He highlighted that Vietnam’s strong agricultural and textile exports are expected to benefit from UAE’s global connectivity, enhancing supply chains between East and West.

At the Central Bank of the UAE, Governor Khaled Mohamed Balama pointed to the financial stability the agreement promises to bring in the coming years. "This agreement aims to positively increase bilateral trade and investments, which will contribute to economic growth and financial stability," he said, affirming the Central Bank’s commitment to supporting the frameworks that will benefit both nations.

The UAE’s CEPA with Vietnam underscores a key diplomatic and economic commitment, supporting the UAE's ambition to forge stronger ties with high-growth markets across Asia. As both countries prepare to capitalise on this deal, analysts suggest that the UAE-Vietnam CEPA could become a cornerstone for expanded trade and investment with ASEAN nations, marking a new chapter in the UAE’s international economic relations.